Singapore Rolls Out New Crypto Regulations

The Monetary Authority of Singapore (MAS) announced the introduction of new financial regulations for the crypto industry.

This new regulation ensures that customers' digital assets are held separately from the service provider's assets, providing an additional layer of protection against misappropriation and insolvency risks.

One of the cornerstones of the new guidelines is the need to store 90% of customer assets in cold wallets, making it significantly harder for cybercriminals to steal them from non-internet-connected wallets. 

Pablo Vazquez, Head of Operations of Meta Pool said “Singapore is currently one of the highest growing regions for the crypto industry in Southeast Asia, in this sense it's how it becomes important to have clear regulations for the crypto players”.

How will the new crypto regulation impact the crypto market?

The Monetary Authority of Singapore also mandated not allowing a single person to control all customer assets, thus further reducing the risk of fraud or an unauthorized transfer. A slight exception is made for smaller firms, which only need to ensure that two people can control.

Nevertheless, many service providers are expected to prefer MPC wallets, which divide private keys into several shares. To conduct a transaction, at least two out of three shares will be required.

The MAS has consistently voiced concerns about the suitability of cryptocurrencies as investments for retail consumers. In line with this stance, the new guidelines prohibit service providers from allowing retail customers to engage in activities such as pledging, lending, or staking their digital assets. Other guidelines include managing conflicts of interest, disclosing information to customers, and issuing monthly statements.

These regulations come after extensive consultations and reflect Singapore's proactive approach to managing the risks associated with the burgeoning crypto market.

Service providers currently operating in the market are given a transitional period to comply with the new licensing requirements, including the submission of an external auditor's attestation report within nine months. Non-compliance could lead to the termination of their operations in Singapore.